United States v. Eugene T. Markgraf and Nancy J. MarkgrafUnited States v. Eugene T. Markgraf and Nancy J. Markgraf
Lead Opinion
This appeal from a judgment of foreclosure entered against appellants Eugene and Nancy Markgraf raises several issues regarding the Secretary of Agriculture’s duties under
I.
Between 1976 and 1979, the Markgrafs obtained a series of loans from the FmHA. These loans varied in purpose, amount, and terms. In May 1978, the Markgrafs began to default on their loans. The Markgrafs have not made any payments on any of their loans since March 31, 1980.
In April 1979, the FmHA district director prepared a problem case report on the Markgrafs after reviewing their account. The district director concluded that the Markgrafs’ account probably would require liquidation if they failed to repay a 1979 loan. The Markgrafs failed to repay this loan.
In March 1980, the Markgrafs discussed the status of their loans with their FmHA county supervisor and requested further financing for 1980. The supervisor told the Markgrafs that he would not recommend further financing.
By letter dated August 15, 1980, the FmHA notified the Markgrafs that it was accelerating the unpaid balance of their loans.
The district court entered summary judgment of foreclosure against the Markgrafs. The district court held that the Secretary’s authority to implement
On appeal, the Markgrafs argue that the FmHA is required to implement
The United States argues that
II.
The first issue we address is whether the Secretary of Agriculture must implement
We begin, as we must, with the language of the statute itself. Howe v. Smith,
In addition to any other authority that the Secretary may have to defer principal and interest and forego foreclosure, the Secretary may permit, at the request of the borrower, the deferal of principal and interest on any outstanding loan ... and may forego foreclosure of any such loan, for such period as the Secretary deems necessary upon a showing by the borrower that due to circumstances beyond the borrower’s control, the borrower is temporarily unable to continue making payments of such principal and interest when due without unduly impairing the standard of living of the borrower.
Any inferences from the statutory language of
The legislative history also indicates that Congress intended the implementation of
Furthermore, the House Report compared
Finally, the congressional debate on the 1978 Act shows an intent to make the implementation of
I should note that the original form of my amendment gave the Secretary of Agriculture no discretion in the implementation of the loan deferral program. However, as the result of the personal assurance I have received from the Secretary of Agriculture that the loan deferral program will be carried out without interest being charged on interest, I have modified my amendment so that this deferral program will be within the Secretary’s discretionary authority. I hasten to add, however, that the prohibition on the charging of interest on interest remains mandatory for this program.
124 Cong.Rec. 12133 (1978). This comment evidences that Congress intended the Secretary to implement
We deem it appropriate to give some consideration to the Secretary of Agriculture’s position that
We note that in similar circumstances, courts have held that the failure to implement a statute containing precatory language was improper. In Abrams v. Hills,
On balance, the statutory language and legislative history lead us to conclude that the Secretary of Agriculture must implement
We note that Congress is aware of the controversy as to whether the implementation of
We turn next to the issue of whether the Secretary is required to promulgate regulations to implement sec
We cannot, however, dictate the process through which the Secretary must act to articulate standards. It is a fundamental principle of administrative law that the choice between rule making and adjudication is one primarily for the discretion of the agency. SEC v. Chenery Corp.,
One additional fact leads us to conclude that we cannot require the Secretary to promulgate regulations. The original House version of
Finally, we turn to the issue of whether the Secretary must provide FmHA borrowers with personal written notice of the availability of
The general rule is that everyone is charged with notice of the contents of our federal statutes. See Federal Crop Insurance Corp. v. Merrill,
Because of the policies supporting this rule, we will not lightly infer a duty to provide notice. Where Congress wishes to alter the rule and impose a duty of providing notice, it must do so in reasonably explicit terms. See Denton v. United States,
We emphasize that we in no way preclude the Secretary from mandating, through regulation or otherwise, that the FmHA must provide borrowers with personal notice of the availability of relief under
We note that the FmHA has promulgated regulations requiring that FmHA borrowers receive notice of servicing options, including deferral, at the time that they make their loan application. The Fourth Circuit, in United States v. Hamrick,
III.
In summary, we hold that the Secretary is required to implement
The Markgrafs have raised other arguments, which we determine to be without merit.
Affirmed.
Notes
. This court may affirm a district court's conclusions even where the lower court applied the wrong reasoning or relied on incorrect grounds. Beach v. Owens-Corning Fiberglas Corp.,
. As of May 21, 1981, the unpaid principal balance of the loans was $293,109.35.
. Cf. State Highway Comm’n v. Volpe,
. We emphasize that we do not rely in any way on subsequent statements of legislators in our determination of congressional intent. Subsequent statements of legislators are not probative of the intent of the Congress that passed a statute. See United States v. Clark,
. The Fourth Circuit in United States v. Hamrick,
. We realize that this is a harsh result. However, the Supreme Court has stated that the rule that ail persons are charged with notice of statutes applies "regardless of actual knowledge ... or of the hardship resulting from innocent ignorance.” Federal Crop Insurance Corp. v. Merrill,
Dissenting Opinion
dissenting from the denial of rehearing en banc.
At a time when the very large number of federal court of appeals decisions being
As the panel opinion explains,
It is not a compelling reply to this argument that everyone is presumed to know the contents of statutes. This is a legal fiction, and for more than 200 years we have been told that the proper office of legal fictions is to prevent, rather than to create, injustices. See 3 Blackstone, Commentaries on the Laws of England 43 (1768). It would not be much consolation to a farmer whose farm had been foreclosed without his knowing about the relief he might have gotten under section 1981a that he ought to have studied the United States Code more carefully; it is the kind of response that breeds popular disrespect for law. There ought to be a better reason for turning down his claim, such as the administrative burden to the government. But there does not seem to be any such burden. All that the approach of the other circuits requires the government to do is to add a sentence to the notice of foreclosure. The panel opinion of this circuit acknowledges that the burden is slight; the government’s brief makes no contrary claim.
In rejecting the approach of the other circuits, the panel cites cases such as Federal Crop Insurance Corp. v. Merrill,
As is often true in matters of statutory interpretation, it is not certain what Congress intended. Maybe — though there is no indication of this — it wanted to minimize the expense of the program by keeping many of the intended beneficiaries in the
To repeat an earlier qualification, I am not suggesting that every time Congress passes a statute those charged with administering it must send written notice of its contents to all the intended beneficaries. The question before us is more particular than that; it is not unfairly stated as whether Congress meant to authorize the Farmers Home Administration to hide the existence of the newly enacted section 1981a by omitting from the notice of foreclosure all reference to the procedure by which the recipient of the notice might be able to prevent foreclosure. Maybe this is what Congress did mean to do but the contrary interpretation of the statute by the Eighth and Tenth Circuits is neither so clearly mistaken nor so far-reaching in its consequences that we ought to indulge our own views and reject theirs without going en banc, and by rejecting create another intercircuit conflict. Although the issue is not an earthshaking one, it is not a happy situation to have a rule that entitles farmers in the states of the Eighth and Tenth Circuits to notice of their rights under section 1981a, but not farmers in the states of the Seventh Circuit. I am not sure that even the government comes out much ahead, since now it must decide whether to send different notices in different parts of the nation. Of course whatever we do the government might decide to keep litigating the issue in the remaining circuits; but if we joined the Eighth and Tenth Circuits it might decide to throw in the towel. Indeed, I hope the government does so now, by heeding the panel’s suggestion that it comply throughout the nation with those circuits’ ruling. But it need not; and lacking confidence that it will I respectfully dissent from the decision not to hear this case before the full court.